TDG closes above its opening price after recovering from early selling pressure
Transdigm Group Incorporated Inc. (TDG) Technical Analysis Report for Jul 31, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, TDG ended the month -2.37% lower at 431.58 after edging lower $1.76 (-0.41%) today, notably underperforming the S&P 500 (0.77%). Trading up to $7.76 lower after the open, Transdigm Group managed to reverse during the session as bulls took control ending the day above its opening price. The last time this happened on July 17th, TDG actually lost -0.47% on the following trading day. Closing within the prior day's range, prices failed to decisively move beyond the previous day's trading range in a lackluster session.
Daily Candlestick Chart (TDG as at Jul 31, 2020):
Friday's trading range has been $10.84 (2.52%), that's below the last trading month's daily average range of $13.00. Weekly volatility is also lower, being slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for TDG.
Two candlestick patterns are matching today's price action, the Bullish Spinning Top which is known as bullish pattern and one bearish pattern, the Hanging Man.
The share shows weakness in the short-term (in accordance with its long-term downtrend) with only the medium-term trend still being bullish.
Buying might accelerate should prices move above the nearby swing high at 438.83 where further buy stops could get triggered. Selling might speed up should prices move below the close-by swing low at 418.02 where further sell stops could get activated. As prices are trading close to July's high at 456.35, upside momentum might accelerate should the stock mark new highs for the month.
Among the seven market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Hanging Man" stand out. While it is usually interpreted as bearish, it has actually shown to be bullish for Transdigm Group. Out of 88 times, TDG closed higher 57.95% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the long side has been after 10 trading days, showing a win rate of 63.64% with an average market move of 1.16%.